Suppose There Is an Increase in the Confidence That Workers

question 2

Multiple Choice

Suppose there is an increase in the confidence that workers have in their future employment and income. This will cause

• A)an increase in borrowing which will decrease interest rates.
• B)an increase in saving which will decrease interest rates.
• C)an increase in borrowing which will increase interest rates.
• D)an increase in saving which will increase interest rates.

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Definitions:

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares, typically at the discretion of the bondholder.

Issuing Corporation's Stock

The process by which a company offers its shares to the public for the first time or issues additional shares in the market.

Par Value

The face value of a bond or stock as stated by the issuing company, unrelated to market value.

Premium

An amount paid in excess of the nominal or face value, often in relation to insurance or bonds.